Week 4

E-Supply Chain
1
 Learning
Objectives

• Identify the main elements of supply chain management and

e-procurement
• Assess the potential of information systems to support
supply chain management and e-procurement
• Analyse procurement methods to evaluate cost savings
 Management issues

• Which technologies should we deploy for supply

chain management e-procurement and how
should they be prioritised?
• Which elements of the supply chain should be
managed within and beyond the organisation
and how can technology be used to facilitate
this?
• Which method(s) of e-procurement should we
adopt?
• What are the practical issues with online supply
chain management and e-procurement?
 What is Supply Chain?

• Supply chain is a network between a company

and its suppliers to produce and distribute a
specific product to the final buyer.
• This network includes different activities, people,
entities, information, and resources.
 SCM Management

• SCM is the broad range of activities required to

plan, control and execute a product's flow from
materials to production to distribution in the most
economical way possible.
• Encompasses the integrated planning and
execution of processes required to optimize the
flow of materials, information and capital in
functions that broadly include demand planning,
sourcing, production, inventory management and
logistics -- or storage and transportation
 Benefits of SCM

New Higher
efficiencies profits

Increased
Lower costs
collaboration
 Importance of SCM

improve decreasing
customer operating
service costs

critical role improve

in society quality of life
 Examples of
modern SCM

• Honeywell and IOT

• Robotic Strawberry Picking
• Cainiao Smart Warehouse
• Fedex and Solar Powered GPS Tags
Figure 6.3 Members of the supply chain: (a)
simplified view; (b) including intermediaries
 SCM – some definitions

• Upstream supply chain Transactions between an

organisation and its suppliers and intermediaries,
equivalent to buy-side e-commerce
 SCM – some definitions

• Downstream supply chain Transactions between

an organisation and its customers and intermediaries,
equivalent to sell-side e-commerce.
Table 6.2 Objectives and strategies for
effective consumer response (ECR)
Figure 6.5 A typical supply chain
for a B2B company
Figure 6.6 Push and pull approaches
to supply chain management
Figure 6.6 Push and pull approaches
to supply chain management
(Continued)
Figure 6.6 Push and pull approaches
to supply chain management
(Continued)
 Figure 6.7 Two alternative models of the
value chain: (a) traditional value chain
model; (b) revised value chain model

Source: Adapted from Deise et al. (2000) Figure 6.4(b).

 Figure 6.8 Members of the value
network of an organisation

Source: Adapted from Deise et al. (2000).

Figure 6.9 The characteristics of vertical
integration, vertical disintegration and
virtual integration
 An example
of a car company
Figure 6.10 A typical IS infrastructure for
supply chain management
Figure 6.11 Alternative strategies for modification
of the digital business supply chain
Figure 6.11 Lean supply chain

Lean Supply Chain Management

https://www.youtube.com/watch?v=
wfsRAZUnonI
Figure 6.11 Agile supply chain

 The agile supply chain basically

refers to the use of
responsiveness, competency,
flexibility, and quickness to
manage how well a supply chain
entity operates on a daily basis.
 Unlike the lean supply chain, the
agile supply chain uses real-time
data and updated information to
leverage current operations and
real-time data against demand
forecast, which helps to improve
the overall efficiency and
productivity of the given entity.
Figure 6.11 Agile supply chain

 Supply chain and logistics of

Zara
 https://www.youtube.com/watch?
v=i0GZZINDJzw
 How important is procurement?
• ‘We estimate that for every dollar a company
earns in revenue, 50 cents to 55 cents is spent
on indirect goods and services – things like office
supplies and computer equipment.

• That half dollar represents an opportunity: By

driving costs out of the purchasing process,
companies can increase profits without having
to sell more goods.’ Hildebrand (2002)
• At the right price
• Delivered at the right time
• Are of the right quality
The five rights
• Of the right quantity
of e-procurement
• From the right source

Baily et al. (1994)

 Figure 6.2 Key procurement
activities within an organisation
Table 6.5 Process flow analysis for traditional
procurement (typical cycle time, 5.5 days)

Note: See Table 6.6 on p. 285 for key to symbols

 Table 6.6 Process flow analysis for new
e-procurement (typical cycle time, 1.5 days)
Figure 6.14 Use of different information systems
for different aspects of the Fulfilment cycle
Figure 6.15 The three main e-procurement
model alternatives for buyers
 Figure 6.16 Integration between
e-procurement systems and catalogue data
E-procurement
Software

E-procurement
software examples:
https://www.capterra.c
om/procurement-
software/
 Summary

• You should be able to identify the main

elements of supply chain management and
e-procurement
• You should be able to assess the potential of
information systems to support supply chain
management and e-procurement
• You should be able to analyse procurement
methods to evaluate cost savings